Preliminary Analysis: First Batch of Stimulus Round 2 Awards

RUS, NTIA and the White House held a preliminary conference call last week to talk about the first batch of NOFA Round 2 (broadband stimulus) award winners.

No doubt the winners are popping champagne corks and started their 4th of July weekend fireworks early. The rest of the applicants and some of the rest of you probably want to get some sort of word on winners so crystal ball gazers can try to predict how the rest of this funding round will go.

I’ll try to help you out a little. Two weeks ago I wrote an analysis of grants RUS awarded for NOFA 1 in case you want to get a little perspective before reviewing our first hint at what NOFA 2 might offer.

The conference call was a little light on detail, but here are some highlights.

  1. $795 million in grants and loans were awarded, $390.9 million in BIP grants from the Department of Agriculture, and  $404 million from the Departments of Commerce’s BTOP program.
  2. 66 projects were funded in total, split between 29 NTIA and 37 RUS awards.
  3. 11 grants are for public computer centers, the rest go to infrastructure.
  4. By mutual agreement, NTIA is funding middle mile projects (plus public computer centers and broadband adoption), and RUS is funding predominantly last mile projects though four of their awards are going to middle mile projects.
  5. 37 states and the District of Columbia received grants or combo grants/loans.
  6. Iowa is the big state winner, bringing home the most number of awards (six) and the most bucks ($89.8 million). Georgia is a strong second place in total dollars, primarily on the strength of a $48.1 million award to Wilkes Telephone & Electric Company.
  7. D.C.’s $17.5 million infrastructure award is, if memory serves me correctly, the only large infrastructure win by an urban area
  8. From the summary roster, it’s impossible to tell if any awardees are wireless or hybrid wireless/wired network projects. But RUS Administrator Jonathan Adelstein says they’re seeing in NOFA 2 some excellent wireless projects, including 4G networks that promise incredibly high data throughput.
  9. At first blush, it appears 10 infrastructure awards went to nonprofit or government organizations and 11 went to telecom co-ops. The remaining 34 awards went to local and regional private sector companies, no big name incumbents.

Additional observations

It was notable that NTIA and RUS were all one big happy family giving out the goodies together, and sounding more relaxed about it. The gears of these two agencies didn’t mesh very well at points during Round 1 and it was noticeable. Besides divergent missions and different constituencies, the rules governing the game appeared to throw more than a few monkey wrenches into the works.

The streamlining and clarifications of the rules for NOFA 2, as well as establishing clearer agency roles to minimize mission overlap, seem to be working. The Twitterverse hasn’t been buzzing nearly as much with angst and agony from applicants. More importantly, a lot was said yesterday about how hard everyone’s working to ensure projects funded by the respective agencies complement each other.

This latter is key because the Achilles heel of RUS’s almost exclusive focus on last mile projects is backhaul. Backhaul for rural networks is more challenging and expensive to build. Applicants can bring great ambitious projects to the table, but crappy and/or limited backhaul will cripple if not kill the best of plans. Pay attention to how grant winners address this issue if you want a predictor of project success.

An interesting question that came up in the call had to do with job creation. We’re talking complex infrastructure here. Is it realistic to expect, as the Administration will say today, that this batch of awards to produce 5000 jobs?

There could be an assumption (or it’s proven) that companies will hire some folks soon after they win since you can’t wait until the last minute to hire engineers, installers, etc who require training before they can start building. There’s likely other prep work that has to be done as well, and of course, there’ll be the inevitable upsurge in lawyers and accountants. Anyone who didn’t pay much attention to the compliance requirements during the application process are in for a big shock next week.

It comes down to community

I was heartened to hear someone say that the agencies expect states to play an active role once these projects are up and running, reiterating the theme that you’re on your own after taking the Feds money. They don’t want to you coming back in a couple of years with you hat out. This message is timely considering the Pew report released this week clearly identifying states’ roles in advancing broadband in general.

And what are the responsibilities of these towns and counties as they join the ranks of the funded few? Well, the proposal that won isn’t likely the complete blueprint for actual implementation success. Time to call stakeholders together again to fill in the missing pieces.

For those communities that are not part of the broadband stimulus mayhem, you still want to pay attention to what these winners are doing. They could be your inspiration, your education or even a key broadband partner. Take the University Corporation for Advanced Internet Development (UCAID), for example.

UCAID is the biggest single cash winner so far coming out of the NOFA 2 gate, pulling down a $62 million grant. They’re forming a large-scale public-private partnership to interconnect more than 30 existing research and education networks, a project that’ll encompass all 50 states.

Finally, check out these latest finishers in the broadband dash for dollars.

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Craig Settles, president of Successful.com, is an Oakland, CA-based business strategy consultant and author of Fighting the Good Fight for Municipal Wireless, a guide to effectively deploying municipal broadband networks.